DTI frees tenants from beer contracts
Thursday 20 February 1997
The deal, which was welcomed by Inntrepreneur's chief executive, Mike Foster, should allow numerous legal rows between Inntrepreneur and its tenants to be resolved, clearing a stumbling block to a stock market listing. Analysts said they expected Inntrepreneur, which owns 2,900 pubs, to come to the market with a price tag of about pounds 800m.
Inntrepreneur was formed in 1989 when Foster's, which then owned Courage, acquired the brewing interests of Grand Metropolitan and a joint venture company was created to hold the two companies' pub estates. Following a Monopolies and Mergers Commission investigation of the deal in 1990, undertakings were made to reduce the vertical links between the Courage brewing company and the estate and to reduce the geographical concentration of pubs tied to Courage.
Yesterday's decision by the DTI means Inntrepreneur is no longer required to limit its estate to 4,350 pubs, is no longer limited to 20 per cent of the pubs in any petty sessional district and is no longer required to free any pubs it still owns from tie by next year.
In exchange it must allow its tenants to buy beer from brewers other than Scottish & Newcastle, the current owner of Courage, in a move which is expected to reduce tenants' costs considerably. Discounts for barrels of beer have widened in recent years thanks to the increasing buying power of independent chains such as Greenalls and JD Wetherspoon, but Inntrepreneur tenants have largely missed out on the downward trend in prices because of their onerous tie to Scottish & Newcastle.
Mr Foster said: "Inntrepreneur has now been given the opportunity to operate on the same playing field as other independent pub companies."
Announcing the change, John Taylor, Minister for Corporate and Consumer Affairs, said: "I have agreed that Inntrepreneur should be released from the existing undertakings. Inntrepreneur's estate is considerably smaller than at the time the undertakings were introduced. In addition to this, the operation of pub chains has become clearer since the time of the merger. Pub chains can stimulate competition, providing a counter-balancing force to the selling power of the large brewers."
Referring to the ongoing legal rows between Inntrepreneur and its tenants, he said: "I recognise that there has been some friction between Inntrepreneur and its tenants. I welcome the recent issue of a Code of Practice covering Inntrepreneur's relationship with its tenants, which has demonstrated the company's desire to resolve these differences. I am sure that Inntrepreneur will respond to this decision in a similar spirit, seeking to foster relationships with its tenants."
The decision to allow Inntrepreneur to extend its tie beyond 1998 is certain to anger some tenants who have alleged inflated beer prices as a result of the current tie agreement.
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 London council removes 'unacceptable' Stamford Hill posters telling women which side of the road to walk down
- 4 The response to my Pizza Express review has been overwhelming, and taught me a lot about journalism
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
London council removes 'unacceptable' Stamford Hill posters telling women which side of the road to walk down
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish referendum: Police struggle to control Unionist rally in Glasgow's George Square
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...